Explained : Mental health and insurance

As we touched on earlier, mental health challenges are really common, with one in one in five New Zealanders experiencing at mild or more severe symptoms of depression and anxiety. Mental illness can have a really big impact on people’s lives and even abilities to work and earn an income.

For customers experiencing mental health challenges, insurance can play a big role in getting the support you need. If you’re unable to work, the right insurance can relieve the financial pressure on you and your loved ones and give you space to focus on your recovery.

We can help you get a diagnosis, and fund sessions with psychiatrists and psychologists to identify the cause of your condition and create a rehabilitation and treatment plan for the best outcome for you and your health.

But it’s not just about the ambulance at the bottom of the cliff. When you’re fit and healthy with the right protection in place, you can be confident that should the unexpected happen, Chubb Life will be by your side with financial support. With one big worry taken off your plate, you can focus on maintaining your physical, mental and social wellbeing and enjoying life on your terms.

Case study 1: Sarah*

Reason for claim: Anxiety and depression

Benefit claimed on: Income Cover

Cover level $4,000 each month for up to two years

What happened: After Sarah’s (39) anxiety and depression stopped her from being able to work as a self-employed business owner, she put in a claim on her Assurance Extra income cover.

How Chubb Life helped: While she was off work, Chubb Life paid Sarah $4,000 each month which she could use however she needed – on any debt, household or business expenses.

Chubb Life also paid for a psychiatric assessment to confirm the diagnosis and discover the cause of the condition. The psychiatrist created a treatment plan to help her get back on her feet. Chubb Life also paid for 12 sessions with a Clinical Psychologist, which was partially covered by the Client Membership Benefits allowance of up to $1,000 each year.

The outcome: Sarah was able to gradually begin to return to work. 

* Name has been changed

Just like physical conditions such as diabetes and high blood pressure, mental health conditions can affect your long-term risk of something going wrong. 

If you have a history of mental health symptoms or a diagnosed illness, your life insurance company will ask questions about your diagnosis, what sort of treatment you've received, and how long you’ve had symptoms.

Once your insurer has all the information they need about your medical history (mental and physical health), they’ll talk to you about what sort of cover they can offer. This could be:

• Full cover for mental health issues
  Even if you’ve had a history of mental illness, insurers will often be able to fully cover you for your pre-existing mental health conditions. Sometimes this may come with a higher premium, to cover the higher risk that you’ll claim on your policy.
• An exclusion for specified mental health issues
  An exclusion is when an insurer says they’ll cover you unless the reason for your claim is directly or indirectly related to your pre-existing condition.
  
  Insurance is there to protect you against the unknown, so your insurer might not be able to cover conditions that are likely to affect you in future – but they could cover against other unexpected issues.  
• A deferral (or wait and see)
  If your insurer believes there’s too much uncertainty about your physical or mental health, they may “defer” your application. This means they won’t approve your application to take out insurance now, but agree to reconsider your application after a certain timeframe.
  
  An example of this is if your anxiety is currently making it really difficult for you to do your job, an insurer may defer your application for year, so they can see if your anxiety is still causing problems down the track.   
  
  If you’re worried about what medical information you need to share with your insurer, talk to your Adviser. They’ll be able to ask you the right questions to make sure you include all the necessary medical information in your application, and be your friendly guide through the application process.

As we touched on above, if you have a history of mental health issues and aren’t honest or leave out important information when you apply for cover, this could affect your ability to claim.

Another reason an insurer could decline your claim is if you didn’t meet the claim criteria. For example with an Income Protection benefit, you can claim if a physical or mental health condition makes you unable to work. If a mental illness affects your life but isn’t severe enough to stop you from working, you won’t be able to make a claim. That same criteria would still apply for a physical health condition like a broken leg.

Some policies also have some specific exclusions, for example Chubb Life’s Income Protection benefit has an exclusion against intentional self-harm. This means if the reason you can’t work is because you deliberately injured yourself, you won’t be able to claim – even if the reason you self-harmed was related to a mental health issue.

According to the Ministry of Health one in three adults in New Zealand have a moderate or high risk of problematic substance use. At Chubb Life, we cover customers if their alcohol dependency prevents them from being able to work – although we don’t cover alcohol-related injuries. 

Case study 2: Alcohol dependency

Reason for claim: Alcohol dependency

Benefit claimed on: Total Temporary Disability

Cover level $4,000 each month for up to two years

What happened: Tom* (37) was diagnosed with alcohol dependency which left him medically unable to continue working as a plumber. 

How Chubb Life helped: For two years while Tom was unable to work, Chubb Life paid the family $4,000 each month to cover Tom’s lost income.

The outcome: Tom and his wife Hannah* used the payments to cover the mortgage and household bills. This made a real difference as Hannah was on a reduced income as she was on maternity leave, looking after their new baby.

* Names have been changed

Each Assurance Extra benefit covers a specific risk to your financial future. Some of these benefits include cover for mental illness, but other benefits don’t (like our Redundancy or Specific Injury benefits). Here’s how the different benefits can work together to protect against the unexpected, for both your physical and mental health.
 

• Life & Life Income Cover
  Commonly known as “life insurance”, “term life insurance” or “term insurance”, this benefit provides a lump sum payment to you or your loved ones if you die or are diagnosed with a terminal illness. Even if mental illness is a contributing factor to your death, you can still be covered under this policy. When you first take out a policy, you’re not covered for death by suicide – but after 13 months cover for suicide begins.
  
  Some customers may have exclusions relating to their individual mental health history – but if this applies to you, we’ll talk about this when you first sign up.  
• Income Cover
  This benefit pays you a monthly amount to compensate for your lost income if you become unable to work as a result of an accidental injury or physical or mental illness (for example depression or alcohol dependency).
  
  This benefit only covers accidental injury, so any intentional self-inflicted harm including attempted suicide isn’t covered.
  
  Your ability to earn an income may be your biggest financial asset, so protecting your income is one way of protecting your family’s financial future against the unexpected.
• Mortgage Repayment Cover
  This benefit pays you a monthly amount to help cover your bills if you become unable to work due to an accidental injury or physical or mental illness (such as depression or alcohol dependency).
  
  This benefit only covers accidental injury, so any intentional self-inflicted harm including attempted suicide isn’t covered.
  
  Despite the name, you don’t need to have a mortgage to take out this cover. You can use the payout for mortgage, rent or bill payments, it’s up to you.
• Redundancy Cover
  If you’re made involuntarily redundant, you could receive up to six months of payments to support you while you look for a new job. Since this benefit only focuses on redundancy, your physical and mental health won’t affect your claim.
  
  Redundancy Cover can be one tool to protect your mental wellbeing. Losing a job can have a severe impact on your mental health, with the unexpected stress of covering bills and keeping your family afloat. Redundancy Cover can give you the peace of mind that you and your loved ones will be protected while you get back on your feet.
• Specific Injury Cover
  If you suffer an injury like a fractured bone, serious burn, or lose sight or hearing, you’ll receive a lump sum payment to use on your medical treatment, household bills or anything else you need.
  
  This benefit only covers accidental injury, so any intentional self-inflicted harm including attempted suicide isn’t covered.
• Trauma Cover
  This benefit pays a lump sum amount if you suffer from one of the 46 specified serious illnesses or conditions, like cancer, heart attack, major head trauma, Alzheimer’s disease and dementia.
• Complete Disablement Cover
  If you become completely disabled after illness or injury, you’ll receive a lump sum payment to support you to focus on your recovery. This covers conditions including Parkinson’s disease, End-stage chronic lung disease, Alzheimer’s disease and dementia.
• Premium Cover
  If you need to claim on one of the other Assurance Extra benefits, Premium Cover means you won’t need to continue paying your premiums while you’re receiving claim payments from Chubb Life.
• Business Assurance
  If you’re a small business owner, your success may not rely just on you and your health, but also the key people in your business. With Business Assurance, you can protect your business and have a plan for the event someone you rely on is unable to work due to their physical or mental health.